HJR56 will create an economic environment conducive to business growth. According to The Beacon Hill Institute’s Competitive Report (2008), Missouri’s overall ranking (29) and its Business Incubation ranking (32) indicates the need for tax reform.
HJR56 is simple and transparent. Unlike our current 10-layer tax code, HJR56 allows state taxes to be paid at the time of purchase of services and new goods. There will be no state tax on business-to-business purchases. Gone are the complicated and costly income tax forms. The savings in compliance costs to businesses is staggering. Money formerly used to find and game tax loopholes can now be utilized for growing businesses and/or providing better services to employees.
Eliminate the compliance cost of doing business (often referred to as the hidden tax or 23 cents per dollar of cost of purchase) and prices to consumers can be lowered. Companies choosing to not lower their product cost or to not pass on savings to employees will face the effect of market competition. Consumers tend to shop for the best price and consumers keep business doors open. Employees look for good benefits when deciding on job opportunity.
The complexity of tax codes hinders growth of businesses and negatively influences our ability to draw new businesses into our state. Private sector job growth in Missouri (18.5 percent 1990-2006) ranks second from last in our six state region as does our real GDP growth (40.7 percent compared to the national average of 50.2 percent) for the same period.
Who stands to be hurt the most by HJR56 passage? Lobbyist and politicians who depend upon the exchange of votes and donations for favorable tax codes. Educate yourself by visiting www.nomoincometax.org to find a FairTax group in your area.
Beverly Martin is a member of Callaway Citizens for FairTax. She lives in Fulton.